1. Field of the Invention
The present invention relates to a system and method for costs accounting management, and especially to a system and method for integration of material costs of a manufactured product.
2. Background of the Invention
During the 1970s and 1980s, many private enterprises were able to prosper while paying relatively little attention to cost management. This was particularly the case with smaller manufacturing companies that were not significantly affected by international competition. Since that time, consolidation and corporate takeovers have led to the emergence of numerous large-scale enterprises, whose commercial activities are correspondingly complex and increasingly subject to intense international competition. When certain of these companies have been able to increase revenue but without enjoying corresponding increases in profit, their competence in the area of cost management has been called into question. As one of the most important aspects of corporate management, effective cost management is closely related to cost analysis and profit distribution. Cost management is fundamental to the competence and development of virtually every company.
At present, there are many types of computer systems and management methods related to cost management. Most of these systems and methods focus on collecting cost data, and adopting a single type of or simplified apportionment standard such as direct labor work time, machine work time etc. in order to apportion costs to a production costs center and then to a product. For example, U.S. Patent Application Publication No. 2002/0069103 published on Jun. 6, 2002 provides “Methods and Systems Enabling the Identification of Actual Costs in a Transaction Based Financial and Manufacturing Environment.” The disclosed method and system collects material costs data of at least one operation and material costs data of at least one material from a business activity, gives each cost an identifier which corresponds to an operation or a material in the business activity, stores the material costs data according to the identifiers, and then displays an output according to the material costs data. However, this method can lead to underestimations or overestimations of product costs, and result in undercharging or overcharging of customers. The resulting inconsistencies between product costs and revenues from customers can cause corporate management to make wrong decisions.
What is needed is a system and method of cost management which overcomes the above-described problems.